Russia's defence minister faces questioning over fraud probe

Russia's defence minister could face questioning over accusations that a state
agency formerly under his control sold off key military real estate to
commercial companies at far below its market value.

State television and other media in Moscow predicted Anatoly Serdyukov would be called to give evidence as a witness.

Mr Serdyukov served until last year as chairman of the board of Oboronservis, a defence agency where prosecutors say up to £60m of public funds were lost as a result of the fraudulent scheme.

Analysts believe the minister, 50, may have been targeted in the corruption probe because of a personal clash with former Deputy Prime Minister Viktor Zubkov, 71, who is a close ally of President Vladimir Putin.

Mr Serdyukov is said to have a relationship with Yevgeniya Vasilyeva, 32, a director of Oboronservis and a suspect in the case. When police raided her luxury flat at 6am on October 25 a tabloid news website linked to the Kremlin quickly reported that Mr Serdyukov was unexpectedly found at Ms Vasilyeva's home.

It is uncommon for such information to be leaked, but Mr Zubkov's daughter Yulia is Mr Serdyukov's estranged wife and it is thought the former deputy prime minister is displeased with the defence chief's peccadillos.

Officers from the Investigative Committee say they seized £620,000 worth of diamonds, pearls and other jewellery, several antiques and a large sum of money during the raid on the flat and Ms Vasilyeva's office.

It is alleged that employees of Oboronservis invested heavily in military assets including a design bureau that once developed rocket silos and then sold them at low prices to commercial associates with whom they shared the profits. Two people have been arrested in connection with the probe.

Mr Serdyukov, a former furniture store manager and head of Russia's tax service, has not commented on the affair.